Small minority to make crucual decisions on ‘fair pay’ agreements

Fair Pay Agreements “would set minimum standards to lift wages and conditions across an industry or occupation”, but could be initiated by a small minority of workers – just 10%, or less (1,000 workers). Is that fair? A minority in, say Auckland, could effectively end up imposing ‘fair pay’ across an industry across the country.

This is what the Fair Pay Agreement Working Group has recommended. The Government will now consider what they do – this may not be straight forward, with Labour and Greens requiring the support of another minority, NZ First.

Business is collectively losing its mind over the working group’s recommendations. It’s calling it a return to the national awards of the 1970s.

Business hates that the negotiations can be triggered by as little 10 per cent of the industry’s workforce. Business hates that the contract agreements would be compulsory for all employers in that industry. Business hates paying employees more than it has to.

Business has a few fair points. We can’t expect the cafe owner in Balclutha to pay staff exactly the same wage as the Auckland cafe owner making a killing thanks to the money and foot traffic a city delivers. There should be concessions to regional variance.

These recommendations probably won’t all be accepted by the Government. Labour’s coalition partner New Zealand First might challenge many of them, if not all. Winston Peters’ party has already temporarily pulled its support on Labour’s employment law once before.

So it is far from a done deal at this stage.

But, the motivation behind these recommendations is on the money. Kiwis are underpaid.

That’s debatable. In the private sector we are generally paid what companies can afford to pay and stay in business.

The same goes for the fair pay agreements outlined in the Jim Bolger report delivered to the Government this week.

But given New Zealand First’s track record in diluting union-backed legislation, it is hard to imagine the party agreeing to a trigger as low as 10 per cent for workers to force employers to the table for compulsory sector-wide bargaining.

The trouble is that the higher the trigger goes, the less happy the unions will be. A true compromise may result in deeply unhappy unions and employers.

Many of this country’s lowest paid and most vulnerable workers have every right to look back in anger at the steady, inexorable fall in the value of their wages, the undermining of working conditions and the perceived out-of-proportion rewards for their employers and many others in the business community.

Bolger’s group was assembled to address such inequities, and its report released this week suggests we go back to the future.

It recommends the creation of fair-pay agreements, a new version of the old collective bargaining that critics have labelled as “compulsory unionism by stealth”.

There is some sympathy for that argument because the proposal, if adopted, would mean that an entire industry would have to negotiate new minimum pay and working conditions if just 10 per cent or 1000 workers in that industry, whichever is fewer, asked for it.

That creates the potential for major upheaval in businesses that have long moved on from the days of compulsory unionism and the environment that went with it.

The reforms are targeted at the country’s low-paid and most exploited workers.

But there is still the potential for major uncertainty, confusion and disruption for everyone within the complicated ecosystem that is our national economy.

For many, the amount they are paid remains the main measure of their perceived value, from the employer and within society. Work conditions are important, but pay is so often the principal point of anger and agitation.

If employers followed a number of local bodies and now Westpac bank in taking on a living wage for their employees, it would go a long way towards quelling that anger, and possibly even lift productivity.

But local bodies can just put up rates to pay for bigger wage bills. Ratepayers have to pay. If companies put up prices customers can choose not to pay.

This too, of course, is a blunt tool, and would not come without cost. But in conjunction with sensible legislation to protect workers’ rights and conditions, as happened when zero-hour contracts were deemed illegal, it could address many concerns without creating widespread disruption and a threat to the economy.

This working group is right to address inequities on behalf of the country’s workers, but it should be careful not to throw out the businesses with the bathwater.

A minority in Government, NZ First, look to be the deciding factor in whether a minority of workers could enable (or force) ‘fair pay’ on a whole industry, which could put a larger number of workers and their jobs at risk.

Another point – Labour may think it was a master stroke recruiting ex-National MP Jim Bolger to head the Working Group, but why an ageing retired politician? One who is a long way from knowing what ordinary workers feel and experience. Surely there are younger people around who may have a better appreciation of work in the modern world.

34 Comments

David

We have wage growth, there has been wage growth over recent years its a myth that we are underpaid. Some jobs in some industries dont pay well and if you make the cost of labour too high the jobs disappear or inflation eats up any pay rises.
I really dont see what grave injustice that exists that will upturn quite benign labour relations.

Kitty Catkin

There certainly seems to be wage growth in some jobs.. Corky’s niece is doing a 25 hour week in a packing shed and getting an extra $200 for doing the early shift. Because she is on the ‘DPB’ (as most people still call it) WINZ pays for her petrol and gives her van a free annual service…nice work if you can get it.

Duker

Free choices ?
Try negotiating a ‘free choice’ real estate commission. when you sell one of your flippers.
do you get a 3 houses for the price of 2 deals . Maybe because you are a volume seller.
ordinary mugs get take it or leave it.

Duker

Your banks , like their Aussie parents are some of the most profitable , same goes for our Supermarkets ( PaknSave Millionaires feature of the rich lists- and they are just a sort of franchise with most of the work done by head office)

Australia has award system – and it works well enough. Yet in lots of cases their prices are lower than NZ even in distant regional towns like Cairns and Townsville, where Ive been

Alan Wilkinson

Australia has a continent of natural resources to support their wage structure simply by digging holes as well as economies of scale. Ask Kiwis in Australia how generous their welfare is. Happy to tax them and deny them benefits.

Duker

Wage awards covers employers like Coles and Woolworths – they have different ones.
How is that anything to do with ‘digging holes in the ground’
Where is Australia welfare more generous – other than inline with their wage rates.
Unemployment, pension – certainly not a super like ours- health care , schools universities, student loans etc tec.
Their compulsary super rates are far higher than ours.
They have a capital gains tax – shares, collectables, property

Duker

Not a large part of that.
Until a boom in natural resource prices from about 2010 or so especially iron ore,coal the mining sector was 4-5% . 1982 it was 4% 2016 was 5.5%
The boom ended a few years ago. iron ore and coal prices dropped massively , same went for oil and gas.https://www.theglobaleconomy.com/Australia/Natural_resources_income/

I lived in Australia for some years, in large metro area, yet when I came back to NZ I got a substantial pay rise. A few years later Employment Contracts Act came in which wrecked the previous NZ awards system.
Plus they never went through Rogernomics ( which promised higher growth rates) but without it Australia has done better.
Economies are now more linked to services and consumer spending than how many steel mills you have –

Pink David

PartisanZ

That was the idea of the whole “New Zeal Land Socio-Economic Experiment” wasn’t it? … The Social Laboratory … to establish a ‘control’?

Best practice for the Robber Baron Pillage of the rest of world …

But the people … and our export dependence … and the first ‘crash’ just 3 years in … kinda called a halt to it … or at least put the brakes on … until Ruth arrived and staged another ‘Fiscal Crisis’ …

And it turns out every ‘economy’ (often a misnomer for ‘nation state’) has some set of peculiarities – like people demanding basic rights – which makes it impossible to have a Hayekian chimerical Quixotic ‘model free-market economy’ ….

Alan Wilkinson

PartisanZ

Unfortunately, pacifism works both ways. Australians are perhaps more resistant to the likes of relentless, prolonged advertising & PR campaigns to socially-engineer a neoliberal mindset … such as New Zealand ‘endured’ with Rogerednomics?

Duker

PartisanZ

Such was the unfathomably extraordinary indoctrination power of that ‘great’ ideologue politician, now SIR Rogered Douglas, along with his Treasury and Corporate-Political elitist ‘mates’ … The Robber Barons …

Kitty Catkin

PartisanZ

“Thus did the incipient fascism of the farm boys who enlisted in Massey’s Cossacks achieve its apotheosis. The eager young NZ Legionnaire of 1933, now NZ’s Prime Minister [Holland], was finally in a position to act out the right-wing totalitarian fantasies of his genteel Fendalton constituents … and then the frightening news coming in from the coal towns of the West Coast and the wild heart of the North Island: of whole neighbourhoods where the police dare not go … How long could Walsh hold the FOL in check? How long before someone was killed? ‘If blood be the price of your cursed wealth’ … they too [the First National Government] remembered 1913.

But what else is trade unionism, if not a variation on demanding money with menaces? And what, for that matter, is the whole labour movement, if not a glorified protection racket? As an economic system, capitalism is likewise a thieves’ charter, mandating a social and political order in which the law of the jungle is given the status of high moral principle.” pg 176

“In a desperate and deeply opportunistic move to placate his growing number of enemies on the Right, Muldoon had, in 1983, bowed to the pressure of his labour minister, Jim Bolger, and sanctioned the abolition of compulsory union membership. Many employers were ambivalent about the wisdom of leaving the trade unions in the hands of members by conviction, rather than compulsion … their elimination [might] produce more, rather than less, industrial disruption.

They need not have worried … its impact on union density was nothing short of catastrophic … The union movement could not survive the elimination of compulsion. The unions knew it and, what was much, much worse, the Labour politicians knew it. Upon becoming government they restored the status quo … [Unions] were to use this reprieve to prepare for [the inevitable] … In the meantime, the issue lay there, in the [Fourth Labour] government’s lap, like a loaded pistol … The FOL knew exactly what would happen if it attempted a serious mobilization of its membership against Roger[ed] Douglas’ reforms.

[Minister of Labour] Stan Rodger had no faith in the decentralised and raucously democratic FOL as a visible social partner … The FOL’s affiliated unions may have been multitudinous and small, but together they had proved remarkably effective at reflecting the temper, mood and will of the NZ working class … The new system replaced this with a locked room full of union officials, all paid well in excess of the average wage, playing industrial card games with the lives of hundreds of thousands of New Zealanders …

Ultimately, it was a Faustian bargain the FOL leaders struck with Stan Rodger: a seat among the elite at the state’s table, in return for the movement’s democratic soul. And, as always, the Devil would be back for his due before the story was over.” pgs 288 – 290

It is for us, peering back from the safety of this bright, digital world, into the grainy black-and-white of yesterday, to appreciate the mighty struggle of the [1951] Waterfront Lockout. To enter into it imaginatively, and strive to grasp the crucial place it occupies in our nation’s history.” – pg 200

– ‘NO LEFT TURN’ by Chris Trotter

I don’t want to live in a country that remunerates workers with “fair pay” or considers their requests for better working conditions … God forbid!!! Or a nation that gives the *Precariat* they have created any bargaining power beyond the *cult-worshipped* individual …

Duker

They still think that today – ‘trade unionism is demanding money with menaces’
Withdrawing your labour as a group is a fundamental right, and the employers do so on their side – lock out their employees

Alan Wilkinson

Choosing who to hire is a fundamental right as is enforcing or terminating an employment contract – from both sides of it. Being forced to sign a contract is a violation of fundamental rights whether employer or employee.

PartisanZ

Yes Alan … in Murray Rothbardland … and even there still in a fundamentally unequal power relationship.

In Capitalism, the “thieves charter” that mandates a social and political order where the law of the jungle is given the status of high moral principle, employers are the Big Cats, and employees are the Herd of Antelope …

“Capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism. Not only are they compatible, but you can’t really have one without the other. True anarchism will be capitalism, and true capitalism will be anarchism” – Murray N Rothbard.